Wearable Gadgets Transform How Companies Do Business

2013-10-22 02:40:06

Updated Oct. 20, 2013 7:52 p.m. ET

Big companies are putting wearables to work.

We've all seen gadgets that can measure our heart rates, how many calories we're burning or how many steps we take. Then there are devices that go even further, like Google Glass, which displays text messages and news feeds right up near our eyeballs.

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Now companies are figuring out how to use those kinds of gadgets to improve their business. They're giving wearables to employees and customers to gather subtle data about how they move and act—and then use that

information to help them do their jobs better or improve their buying experience.

Football teams, for instance, are putting monitoring devices in players' undershirts so coaches can tell exactly how fast they're moving and how hard they're exerting themselves. In offices, workers are getting smart badges that tell them how engaged or stressed they are during meetings, while warehouse crews are being supplied with talking glasses that warn them if they're about to fill an order incorrectly or crash their forklift.

For businesses, these gadgets represent a tremendous opportunity, but there is also a big risk involved. People will naturally resist real-world intrusions into their privacy, so businesses need to be very careful about asking employees and customers to strap gadgets on their heads, chests and wrists.

Early experiments with these gadgets have yielded a couple of valuable lessons. If companies push for wearable gadgets to pursue heavy-handed objectives, like ratcheting up efficiency or productivity, the move will invariably backfire and hurt morale. Instead, companies need to link up their goals with individual goals—such as using wearables to make an employee's job safer or more interesting, or giving customers a better deal.

Here are some of the new technologies out there and how companies are using them.

Office Networking, by the Numbers

To get a sense of what this approach looks like, consider the Hitachi Business Microscope—a gadget about the size of a company ID badge that workers wear on a lanyard around their neck.

The device is packed with sensors that monitor things like how workers move and speak, as well as environmental factors like light and temperature. So, it can track where workers travel in an office, and recognize whom they're talking to by communicating with other people's badges. It can also measure how wellthey're talking to them—by recording things like how often they make hand gestures and nod, and the energy level in their voice.

Workers can see how their communication habits and energy levels change depending on whom they're meeting or where—a one-hour brainstorming session with five colleagues where they energetically contributed, compared with the session where they just sat there.

The gadget's LCD screen displays real-time stats for personal feedback and benchmarking, and for implementing larger strategies to improve collaboration. According to Hitachi, one firm introduced the HBM after combining two product-design groups. Several weeks after the merger, the HBM showed little interaction between the two groups. The new manager, who came from one of the old groups, discovered that he was part of the problem, since data showed he was having little or no interaction with many new reports.

So, the new head intentionally made connections with direct reports who weren't previously part of his group. Others struck up new working relationships after they discovered there were people in the other group they could be collaborating with but weren't.

For these setups to work, though, companies need to take privacy into account. Sociometric Solutions Inc., which developed a product similar to the HBM, suggests three approaches. First, let users know in advance exactly what's being tracked and analyzed. Second, assure them that managers see only aggregate data—not stats on individuals. Finally, make participation optional.

Keep the Warehouse Humming

Many big companies track how people move around their websites. Now they can use wearable devices to apply the same kind of analysis to how people move around their facilities.

Consider "smart glasses" developed by Vuzix that use software from SAP AG SAP +3.61%SAP AG ADSU.S.: NYSE $76.41 +2.66+3.61% Oct. 21, 2013 4:07 pm Volume (Delayed 15m) : 3.34MU.S.: NYSE $77.00 +0.59+0.77% Oct. 21, 2013 7:15 pm Volume (Delayed 15m): 38,119 P/E Ratio 23.65Market Cap $90.03 Billion Dividend Yield 1.45% Rev. per Employee $334,85610/21/13 SAP's Co-Head Is Into the Clou...10/21/13 SAP's Co-Head Is Into the Clou...10/21/13 Europe's Stocks to Watch: EDF,... More quote details and news » SAP inYour ValueYour ChangeShort position . The glasses can be used in a variety of settings. In distribution centers, for instance, a high-definition camera in the glasses scans bar codes and then offers warehouse workers voice and visual data on a head-up display. The glasses can warn workers about a number of things—for instance, that an item is fragile and they need to be careful when picking it up, or that they grabbed the wrong item for an order.

When connected to SAP software that manages warehouses, the glasses can monitor traffic flow around the building. They can suggest to workers what item on their list they should pick up next and give them the best route to get there—and warn them if they're about to collide with another vehicle.

Workers can also use the glasses to take more of a hands-on role. For instance, to solve a technical problem, such as a malfunctioning piece of equipment, a forklift operator can have a video chat with a remote expert, who is projected onto the lens's screen.

But, once again, companies that try these kinds of systems need to be careful. Research consistently shows that using new technologies to boost efficiency alone will backfire—workers will start to resent the intrusion. Instead, companies that introduce wearables should aim for goals like worker safety and autonomy. They should stress that the gadgets will mean fewer accidents, fewer returns to deal with and more chances to solve problems themselves.

So, for instance, when visitors reserve passes for various attractions through Disney's website or app, the band will serve as a ticket. Long-range RFID readers, meanwhile, can do things like help staffers greet guests by name when they enter a hotel lobby. (Disney is also testing RFID-enabled cards that work the same way as the bands but aren't read at long range.)

Down the road, Disney may use the aggregate data from the RFID readers to get a much clearer picture of things like wait times and how guests flow through the parks. The company will then be able to adjust its offerings to smooth out the visitor experience. It could encourage guests to visit a less busy area of the park by allowing them to choose, in real time, another attraction for its FastPass+ program, which lets people enter rides with only a short wait. Usually, visitors must make those choices in advance.

Disney has put a number of safeguards in place to protect privacy. Most simply, guests won't have to participate in the program if they don't want to. Those who do can control the level of privacy they want. Beyond that, the bands don't store a visitor's personal information. Instead, the bands have a randomly assigned code that securely links to an encrypted database with user information.

For the Good of the Team

One of the most extensive experiments with wearables isn't in a conventional business—it's on the Buffalo Bills' practice field, where players wear OptimEye monitoring devices from Catapult Sports embedded in their undershirts. Each matchbox-size device is packed with gyroscopes, accelerometers and magnetometers that work with GPS systems to measure the players' acceleration, top speed, changes of direction and total distance run.

Coaches used to apply the eyeball test to gauge the fatigue of players. Now their laptops can crunch the data from the sensors to come up with a "PlayerLoad" stat, letting them see in more objective terms if anyone is overworked—a common cause of injury. If a coach sees that the tackle's total distance run is too high during a Tuesday practice, he knows to reduce the amount of running on Wednesday.

The devices can also get different coaches on the same page. A rookie linebacker, for instance, practices with special teams and defense, units run by different coaches. By analyzing data from the linebacker's wearable device, the coaches can work together to plan his time and intensity level with each practice squad and avoid overtraining.

There is also a long-term strategy at work. By collecting and analyzing data throughout this season, the Bills will be able use the ever-larger data samples to mine new insights while refining each position's safety standards.

A football team doesn't seem to have much in common with an everyday office, but their example holds a vital lesson. Every level of the organization—from players to coaches to the front office—buys into the wearables initiative because it emphasizes goals they all share: protecting players' health while improving their game. Companies that find ways to get their goals aligned with employees and customers can give themselves a big advantage.

Mr. Wilson is a senior researcher at Babson Executive Education. He can be reached at [email protected]

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